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How To: Manage Mid Month Advances
1. Background
Often times, companies will pay employees and/or vendors twice a month, but consider the first payment an 'advance' that will then be collected at the end of the month. For example, a subcontractor might earn $10,000 from the 1st to the 15th. You might then pay him 90% of that amount ($9,000) on the 15th as an advance. Let's say that when the end of the month rolls around, he has earned a total of $24,000 for the month. His end-of-the-month statement would then be a gross payment of $24,000 less an advance collection of $9,000, yielding a net payment of $15,000 for the second half of the month.
You can now create mid-month advances in The Logger's Edge. This functionality is not available by default but must be turned on by a switch in Basic Setup.
You must be logged in as an administrator in order to enable (by checking) the Mid Month advances setting. When configuring the advance functionality, you must also decide whether or the advance will take into account tax (e.g., GST, PST. Thus if the amount otherwise payable is $10,000 without GST and $10,700 with GST, and you are applying a certain percentage, say 90%, you need to decide if the 90% applies to the pre-tax number of $10,000 or the post-tax number of $10,700. The checkbox 'Exclude Tax' governs which way the percentage will be applied.
Limitations of Advances in The Logger's Edge
• An advance cannot be created for a vendor unless there is a vendor statement created. If you would like to give an advance to a vendor who has not yet worked for you, you must create a statement with at least one item on it.
• Per pay period, Harvest Boss only records one advance and one repayment on the advance.
• You may only advance an amount to a vendor and not an employee.
Define Pay Period
You first need to define your pay periods. Let's suppose you pay on a monthly basis (take May as an example) and you issue an advance on the 17th for activity from the 1st to the 15th. There are two ways to set your pay periods up in The Logger's Edge.
1. Create a Period from the 1st to the 31st. Under this approach, you can run your pay any time during the month and it will include all activity recorded up to that date. Thus, if you run your pay on the 17th, the advance will cover all pay from the 1st to the 17th that has been entered in The Logger's Edge. In this case, you would only want to enter loads through the 15th -- loads for the 16th or the 17th should be kept aside until you have issued your advance. If you enter the loads for the 16th and 17th, The Logger's Edge will pick those up and include them on the advance -- a result you probably don't want.
2. Create a Period from the 1st to the 15th. Under this approach, you can run your pay any time during the month and it will include all activity recorded up to the 15th. Thus, if you run your pay on the 17th, the advance will cover all pay from the 1st to the 15th that has been entered in The Logger's Edge. In this case, you don't need to worry about loads for the 16th or the 17th as they will not be included due to the end date of the 15th. Once you have issued the advance, you then edit the end date of the pay period to be the 31st. When the end of the month occurs, you are then set to pay the full month.
Do
NOT create two pay periods. Two
periods works fine for the first half of the pay period, but does not handle the
end of the month. End-of-the-month pay must calculate pay for the entire
month (not just for the second half), and then deduct the mid-month advance in
order to obtain the right result.
Mid Month - Run Pay Calculator
At mid month, run your pay calculator as normal. Select the pay period that spans the period you want for your advance.
Create Advance
Next, view the statements for the vendors to which you want to pay an
advance. The Vendor must appear in the Vendor Statements drop down list in the
pay period for which you want to issue an advance.
To issue an advance, open the Vendor Statements grid for the correct pay period.
Next, click on the 'Issue Advances' button.
A window will appear with a percentage.
The Logger's Edge
will calculate a percentage of the amount owing to advance. This percentage
number defaults to 100.0%, but may be edited to any percentage you want.
Use the format 90.0 to represent 90% -- do not use 0.90 for 90%.
After you enter in a percentage, the advances grid will open. The far right column has a column header of 'Advance'.
You can change the amount of the advance in the blue column by just entering a new amount in the grid.
Once you click OK in the advances grid, your advance amounts will be saved.
You can then click on the View Statements to generate a Vendor Statement
that includes the advance. The Statement indicates how much the vendor has
earned to date and the advance amount. The total only shows the advance
amount. This statement should be exported to PDF or saved as a hard copy.
To review how much has been advanced in each pay period, navigate to Data Entry | Advances Issued to Vendors.
This selection calls up a grid that has two tabs: one for a listing of all advances that have been issued; the second a list of each vendor and his current balance for all advances (all advances less all collections) for all time.
The first tab has a listing of all advances issued and advances collected.
The second tab has a listing of each vendor's current advance balance
Collect upon an Advance
Once an advance has been issued, it may be collected upon in the same pay period or a subsequent pay period. At the end of the month, you want to make sure your pay period covers the entire period - both the first advance period and the second period. For example May 1st to May 31st, where then advance period id May 1st to May 31st.
Next, run your vendor calculator for the entire month - this will calculate total earnings for the entire month.
To collect on an advance, open the Vendor Statements grid for the pay period in which you wish to collect. The statement grid will now show all earnings for the month. Click on the 'Collect Advances' button.
Again, Harvest Boss will ask you to enter in a percentage to collect. You may edit this number.
Once you click OK, the advances grid will open.
Edit the collection amounts in the advances grid if they are not correct. Click OK.
Click 'View Statements' to create a statement with the amount earned for the entire period (both 1st and 2nd half of the month) and the advance collection.
The statement at the end of the month will show total earnings for the month, the advance collection for the month, and the net pay to be paid at the end of the second period of the month.
